SiriusXM Reports First Quarter Year 2022 Results

• Revenue in First Quarter 2022 of $2.19 Billion; an Increase of 6% Year-Over-Year

• First Quarter 2022 Net Income Climbs to $309 Million; Diluted EPS of $0.08

• Adjusted EBITDA of $690 Million, an Increase of 1% Year-Over-Year

• Year-to-Date Capital Returns to Stockholders of $1.3 Billion

• SiriusXM Reiterates Full-Year Subscriber and Financial Guidance

NEW YORK, April 28, 2022 /PRNewswire/ -- SiriusXM today announced first quarter 2022 operating and financial results, including revenue of $2.19 billion, an increase of 6%, compared to the prior year period.  The company recorded net income of $309 million in the first quarter 2022 compared to $219 million in the prior year.  Net income per diluted common share was $0.08 in the first quarter 2022 compared to $0.05 in the prior year period.

Adjusted EBITDA reached $690 million in 2022, climbing 1% from $682 million in the first quarter of 2021. 

"SiriusXM delivered a record first quarter churn rate of just 1.6%, and we drove a 9% increase in average revenue per user to a new all-time high.  Overall, the first quarter marked a great start to the year, even as SiriusXM's near-term subscriber growth remains limited by supply constraints in the automotive industry.  We are making substantial investments to grow our advertising platform through new podcast agreements and to grow SiriusXM digital with enhanced brand and performance marketing.  In the first quarter, we returned $1.3 billion to our stockholders through regular and special dividends and common stock repurchases.  We remain on track to attain our full-year subscriber and financial guidance," said Jennifer Witz, Chief Executive Officer of SiriusXM.

"Content will always power our strong listenership and sustained subscriber loyalty at SiriusXM, and this quarter we continued to expand our offering through new agreements with artists and creators.  We have announced multiple distribution and advertising sales agreements with top podcast brands such as Crooked Media, and several agreements include new content developed specifically for the SiriusXM platform.  We kept our content fresh by launching an array of new pop-up channels and resumed even more live performances with legendary artists," added Witz.

BUSINESS AND CONTENT UPDATE

New vehicle penetration at all-time high.  SiriusXM's hardware was incorporated into approximately 83% of new vehicles sold in the United States in the first quarter of 2022, up from approximately 81% in the first quarter of 2021.  SiriusXM's enabled fleet grew to nearly 146 million vehicles, up 9% from a year prior.

SiriusXM expands content offering and offers even more live performances.  SiriusXM continues to add compelling and timely content across music genres, talk, entertainment, sports and comedy.  SiriusXM introduced listeners to new, limited-time artist channels from the legendary and prolific artist Joni Mitchell, rock and soul icon Tina Turner, decade-spanning alt-rocker Avril Lavigne, and genre-bending country superstar Maren Morris.  The company also launched a year-long channel from one of the bestselling acts in music history, Red Hot Chili Peppers, and curated artist-branded channels that drew headlines and subscriber attention, such as Neil Young Radio and the David Bowie Channel.  SiriusXM gave listeners access to great live performances by major artists including Avril Lavigne, John Legend, John Mayer and Kelly Rowland.

Podcast business continues to grow.  SXM Media, the company's combined advertising sales organization, continues to be a dominant force in podcast ad sales, ranking as the #1 podcast advertising network in weekly U.S. listener reach according to Edison Research.  SXM Media currently represents three of the top 15 podcasts in the country according to Edison Research, including Crime Junkie, Office Ladies, Dateline NBC, and soon a fourth, Pod Save America.

2022 GUIDANCE AND FINANCIAL UPDATE

The Company reiterates full-year 2022 guidance for self-pay net subscriber additions, revenue, adjusted EBITDA, and free cash flow as follows:

• SiriusXM self-pay net subscriber additions of approximately 500,000,
• Total revenue of approximately $9.0 billion,
• Adjusted EBITDA of approximately $2.8 billion, and
• Free cash flow of approximately $1.55 billion.

"Following nearly $1.1 billion paid in special and recurring dividends in February, and approximately $200 million in first quarter common stock repurchases, we ended the quarter with net debt to adjusted EBITDA of 3.5 times, flat from year-end 2021 on a pro forma basis after giving effect to the approximately $1.0 billion special dividend.  Our balance sheet remains well-positioned, and earlier this month we opportunistically executed a $500 million two-year term loan, the proceeds of which we used to refinance a portion of our revolving credit facility balance at a more favorable interest rate.  We retain significant flexibility to continue investing to grow our business, pursue external opportunities, and continue returning capital to stockholders," said Sean Sullivan, Chief Financial Officer of SiriusXM.

FIRST QUARTER 2022 SEGMENT HIGHLIGHTS

Sirius XM Holdings operates two complementary audio entertainment businesses — SiriusXM and the Pandora and Off-platform business.  Further information regarding these two segments will be contained in the company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.  The financial and operating highlights below exclude the impact of share-based payment expense.

SIRIUSXM SEGMENT

• Self-Pay Subscribers Remain at 32.0Million. SiriusXM self-pay subscribers decreased modestly by 25,000, and paid promotional subscribers decreased by 54,000.  Continuing impacts of new vehicle trial structures with certain automakers contributed to negative paid promotional net additions during the quarter.  Total subscribers were 34.0 million at March 31, 2022.  The total SiriusXM trial funnel stood at approximately 6.9 million at the end of the quarter, up from 6.8 million at the end of the fourth quarter of 2021.  Self-pay monthly churn remained approximately flat during the quarter but notched a first quarter record at 1.6%.
• SiriusXM Revenue Increased 6% to $1.7 Billion.  First quarter 2022 revenue grew 6% to $1.7 billion compared to the first quarter of 2021.  This growth was driven by a 9% increase in SiriusXM's average revenue per user (ARPU) to $15.53 and a 3% increase in SiriusXM self-pay subscribers, partially offset by the effects of a lower base of paid promotional subscribers.
• Gross Profit Increased 8% to $1.1 Billion and Gross Margin Remained Stable.  Total cost of services at SiriusXM increased by 4% to $649 million for the quarter compared to the corresponding quarter in 2021.  Gross profit at SiriusXM totaled $1.1 billion, an increase of 8% compared to the 2021 period, producing a gross margin of 62%, a 1 percentage point increase from the prior-year.
• SiriusXM Continued to Offer Special Programming. During the quarter, SiriusXM created special programming recognizing women and Black artists.  In March, Women's History Month, the company devoted a channel to the defining, female-led festival tour of the 90s, with The Lilith Fair Tribute Channel.  It aired alongside a variety of other programming dedicated to female artists across genres.  Earlier, for Black History Month, SiriusXM worked with artists to create the Aretha Franklin Channel, Miles Davis Radio, and The Motown Channel.  The company also launched It's Showtime at The Apollo! Comedy, a channel dedicated to the legendary and star-making variety show.  The channel showcased the very best stand-up from the program's decades-long run, including early performances from some of today's biggest comedians.
• Creating Synergies and Opportunities with Podcasts. During the quarter, SiriusXM also created opportunities for podcast talent to appear on SiriusXM with new channels and shows.  The company launched Freakonomics Radio Network, the first streaming channel to be dedicated to a podcast.  Freakonomics Radio Network is a curated collection of the best of the award-winning series.  SiriusXM launched two new live call-in shows: Open Lines on Faction, in which the hosts of the popular horror comedy podcast Last Podcast on the Left talk directly with listeners about a paranormal topic of their choice; and It's Me, Tinx LIVE, on the Stars channel, in which the well-known digital creator and host of the popular podcast by the same name, gives advice directly to listeners.

PANDORA AND OFF-PLATFORM SEGMENT

• Advertising Revenue Increased 8% to $336 Million.  First quarter ad revenue in the Pandora and Off-platform segment, including the company's podcasting business, increased by 8% year-over-year to $336 million, a record for first quarter ad revenue.  Ad revenue in the off-platform business climbed 43% year-over-year to nearly $95 million in the first quarter.  Ad revenue also benefited from strong monetization of $89.77 per thousand hours at Pandora, compared to $85.69 from the prior year.
• Total Advertising-Supported Listener Hours of 2.68 Billion.  Monthly Active Users (MAUs) at Pandora were 50.6 million in the first quarter of 2022, down from 55.9 million in the prior year period.  Total ad-supported listener hours were 2.68 billion in the first quarter of 2022, down from 2.87 billion in the 2021 period.
• Self-Pay Subscribers Increase Modestly.  Self-pay subscribers to the Pandora Plus and Pandora Premium services increased by 4,000 in the first quarter of 2022 to end the period flat at 6.3 million.
• Gross Profit Flat.  Subscriber revenue increased by 1%, advertising revenue increased by 8% and total cost of services increased by 8% during the first quarter of 2022. This resulted in gross profit in the Pandora and Off-platform segment of $137 million, flat with the corresponding 2021 period, and produced a gross margin for the year of 29%, down 2 percentage points from prior year period.
• Continued Focus on Content.  During the quarter, Pandora created new ways for listeners to experience the music they love with a personalized station Mode curated by Lebron James on Pandora's UNINTERRUPTED Radio and a special Valentine's Day station featuring Pandora's "Top Thumb Hundred" most popular love songs of the past year.  In addition, Pandora teamed up with SoundCloud to highlight innovative emerging artists with the new "Digicore by SoundCloud" station, and added a number of top Latin music artists to its suite of Billionaires Stations, highlighting artists with over one billion spins on Pandora.
• Expanding Podcast Representation.  During the quarter, the company signed global multiyear exclusive agreements with Crooked Media, which showcases some of the most popular and critically acclaimed podcasts in the country such as "Pod Save America," and reVolver, a leading multicultural, audio-on-demand content creator and publisher.  These agreements secured the global advertising sales rights for SXM Media, and continued to expand the company's off-platform business and solidify SXM Media as a leader in the sales of audio advertising for podcasts.

Subscriber acquisition costs increased by 5% to $90 million in the first quarter of 2022 compared to the prior year period, driven by higher equipment installations by automakers.  Sales and marketing costs increased by 28% to $259 million in 2022 compared to the prior year, boosted by increased performance marketing and the continuation of a multi-media national ad campaign promoting SiriusXM which was launched in late 2021.  Engineering, design and development costs rose 9% to $59 million, and general and administrative expenses increased by 3% to $109 million in 2022.

Free cash flow was $258 million, up approximately 22% from the prior year period, primarily due to higher receipts from customers, partially offset by higher satellite capital expenditures.

Net income per diluted common share was $0.08 in the first quarter 2022 compared to $0.05 in the prior year period.  The first quarter of 2021 was impacted by a $245 million non-cash impairment charges associated with the company's SXM-7 satellite loss and certain lease termination costs, and a $95 million benefit associated with a state tax audit settlement, a negative net impact of $0.02 per share.

FIRST QUARTER 2022 RESULTS

(1) The following table reconciles cash, cash equivalents and restricted cash per the statement of cash flows to the balance sheet. The restricted cash balances are primarily due to letters of credit which have been issued to the landlords of leased office space. The terms of the letters of credit primarily extend beyond one year.

Unaudited Results

Set forth below are our results of operations for the three months ended March 31, 2022 compared with the three months ended March 31, 2021.  Legal settlements and reserves and share-based payment expense have been excluded from cost of services line items and presented as their own line items in the table below, as this is consistent with how the segments are evaluated on a regular basis.  Our results also exclude certain purchase price accounting adjustments related to other revenue and revenue share and royalties.  

(1) Allocation of share-based payment expense:

Key Financial and Operating Metrics

A full glossary defining our key financial and operating metrics can be found in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.

Subscribers and subscription related revenues and expenses associated with our connected vehicle services and Sirius XM Canada are not included in Sirius XM's subscriber count or subscriber-based operating metrics.

Set forth below are our subscriber balances as of March 31, 2022 compared to March 31, 2021:

The following table contains our Non-GAAP financial and operating performance measures which are based on our adjusted results of operations for the three months ended March 31, 2022 and 2021:

Reconciliation from GAAP Net income to Non-GAAP Adjusted EBITDA:

 Reconciliation of Free Cash Flow:

Reconciliation of SAC, per installation:

About SiriusXM

Sirius XM Holdings Inc. (NASDAQ: SIRI) is the leading audio entertainment company in North America, and the premier programmer and platform for subscription and digital advertising-supported audio products. SiriusXM's platforms collectively reach approximately 150 million listeners, the largest digital audio audience across paid and free tiers in North America, and deliver music, sports, talk, news, comedy, entertainment and podcasts. Pandora, a subsidiary of SiriusXM, is the largest ad-supported audio entertainment streaming service in the U.S. SiriusXM's subsidiaries Stitcher, Simplecast and AdsWizz make it a leader in podcast hosting, production, distribution, analytics and monetization. The Company's advertising sales organization, which operates as SXM Media, leverages its scale, cross-platform sales organization and ad tech capabilities to deliver results for audio creators and advertisers. SiriusXM, through Sirius XM Canada Holdings, Inc., also offers satellite radio and audio entertainment in Canada. In addition to its audio entertainment businesses, SiriusXM offers connected vehicle services to automakers. For more about SiriusXM, please go to: www.siriusxm.com.

This communication contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, our plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "believe," "intend," "plan," "projection," "outlook" or words of similar meaning. Such forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. Actual results and the timing of events may differ materially from the results anticipated in these forward-looking statements.

The following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:  We have been, and may continue to be, adversely affected by supply chain issues as a result of the global semiconductor supply shortage; The ongoing COVID-19 pandemic has introduced significant uncertainty to our business; we face substantial competition and that competition is likely to increase over time; our efforts to attract and retain subscribers and listeners, or convert listeners into subscribers, which may not be successful, and may adversely affect our business; we engage in extensive marketing efforts and the continued effectiveness of those efforts is an important part of our business; we rely on third parties for the operation of our business, and the failure of third parties to perform could adversely affect our business; we may not realize the benefits of acquisitions and other strategic investments and initiatives; a substantial number of our Sirius XM subscribers periodically cancel their subscriptions and we cannot predict how successful we will be at retaining customers; our ability to profitably attract and retain subscribers to our Sirius XM service as our marketing efforts reach more price-sensitive consumers is uncertain; our business depends in part on the auto industry; failure of our satellite would significantly damage our business; our Sirius XM service may experience harmful interference from wireless operations; our Pandora ad-supported business has suffered a substantial and consistent loss of monthly active users, which may adversely affect our Pandora business; our failure to convince advertisers of the benefits of our Pandora ad-supported service could harm our business; if we are unable to maintain revenue growth from our advertising products our results of operations will be adversely affected; changes in mobile operating systems and browsers may hinder our ability to sell advertising and market our services; if we fail to accurately predict and play music, comedy or other content that our Pandora listeners enjoy, we may fail to retain existing and attract new listeners; privacy and data security laws and regulations may hinder our ability to market our services, sell advertising and impose legal liabilities; consumer protection laws and our failure to comply with them could damage our business; failure to comply with FCC requirements could damage our business; if we fail to protect the security of personal information about our customers, we could be subject to costly government enforcement actions and private litigation and our reputation could suffer; interruption or failure of our information technology and communications systems could impair the delivery of our service and harm our business; the market for music rights is changing and is subject to significant uncertainties; our Pandora services depend upon maintaining complex licenses with copyright owners, and these licenses contain onerous terms; the rates we must pay for "mechanical rights" to use musical works on our Pandora service have increased substantially and these new rates may adversely affect our business; failure to protect our intellectual property or actions by third parties to enforce their intellectual property rights could substantially harm our business and operating results; some of our services and technologies may use "open source" software, which may restrict how we use or distribute our services or require that we release the source code subject to those licenses; rapid technological and industry changes and new entrants could adversely impact our services; we have a significant amount of indebtedness, and our debt contains certain covenants that restrict our operations; we are a "controlled company" within the meaning of the NASDAQ listing rules and, as a result, qualify for, and rely on, exemptions from certain corporate governance requirements; while we currently pay a quarterly cash dividend to holders of our common stock, we may change our dividend policy at any time; our principal stockholder has significant influence, including over actions requiring stockholder approval, and its interests may differ from the interests of other holders of our common stock; if we are unable to attract and retain qualified personnel, our business could be harmed; our facilities could be damaged by natural catastrophes or terrorist activities; the unfavorable outcome of pending or future litigation could have an adverse impact on our operations and financial condition; we may be exposed to liabilities that other entertainment service providers would not customarily be subject to; and our business and prospects depend on the strength of our brands. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found in our Annual Report on Form 10-K for the year ended December 31, 2021, which is filed with the Securities and Exchange Commission (the "SEC") and available at the SEC's Internet site (http://www.sec.gov). The information set forth herein speaks only as of the date hereof, and we disclaim any intention or obligation to update any forward looking statements as a result of developments occurring after the date of this communication.

Source: SiriusXM

Contact for SiriusXM:

Investor contact:
Hooper Stevens
212-901-6718
[email protected]

Media contact:
Patrick Reilly
212-901-6646
[email protected]

SOURCE Sirius XM Holdings Inc.